Correlation Between China BlueChemical and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and Alfa Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China BlueChemical and Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and Alfa Financial Software, you can compare the effects of market volatilities on China BlueChemical and Alfa Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China BlueChemical with a short position of Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and Alfa Financial.
Diversification Opportunities for China BlueChemical and Alfa Financial
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Alfa is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software and China BlueChemical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China BlueChemical are associated (or correlated) with Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of China BlueChemical i.e., China BlueChemical and Alfa Financial go up and down completely randomly.
Pair Corralation between China BlueChemical and Alfa Financial
Assuming the 90 days horizon China BlueChemical is expected to generate 1.25 times less return on investment than Alfa Financial. In addition to that, China BlueChemical is 1.7 times more volatile than Alfa Financial Software. It trades about 0.02 of its total potential returns per unit of risk. Alfa Financial Software is currently generating about 0.05 per unit of volatility. If you would invest 167.00 in Alfa Financial Software on September 2, 2024 and sell it today you would earn a total of 91.00 from holding Alfa Financial Software or generate 54.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. Alfa Financial Software
Performance |
| Timeline |
| China BlueChemical |
| Alfa Financial Software |
China BlueChemical and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and Alfa Financial
The main advantage of trading using opposite China BlueChemical and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, Alfa Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alfa Financial will offset losses from the drop in Alfa Financial's long position.| China BlueChemical vs. Austevoll Seafood ASA | China BlueChemical vs. JJ SNACK FOODS | China BlueChemical vs. Performance Food Group | China BlueChemical vs. Platinum Investment Management |
| Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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